Home Mortgage Giant to Pay $3.8 Million in Fines to F.E.C.

By KATE PHILLIPS

Published: April 19, 2006

Freddie Mac, the home mortgage powerhouse, agreed on Tuesday to pay $3.8 million in civil penalties to the Federal Election Commission, which had accused it of improperly funneling corporate executives' donations to candidates and holding lavish fund-raisers that often benefited congressmen on an influential House committee.

It is the largest fine that the F.E.C. has obtained in a civil case.

Dating from the 2000 elections, the events detailed in the agency's filings show that one of the corporation's executives, Robert Mitchell Delk, was the host of 70 campaign fund-raisers held mainly at the expensive Galileo restaurant here. Those events raised about $1.7 million for federal candidates.

The agency found that Freddie Mac, a federally chartered corporation that promotes home ownership, had violated laws or regulations that prohibit it from some campaign fund-raising activities like using corporate resources for fund-raisers.

Freddie Mac did not contest the findings nor did it concede that it had broken campaign finance rules in most of the instances cited from 2000 to 2003. It did, however, admit to a violation involving a $150,000 donation to the Republican Governors Association that was used for last-minute get-out-the-vote efforts in 2002. The association refunded the money to Freddie Mac eight months later, after Mr. Delk asserted, according to agency records, that he had learned it was not used for general party-building purposes, as the law required.

Given the fine and the agreement, the F.E.C. said it had decided only to admonish the corporation's former chairman, Leland Brendsel; a former vice president, Clark Camper; Mr. Delk; and consulting companies that were organizing the political dinners. The agency's chairman, Michael E. Toner, was the only commissioner who voted against the decision; he would not comment on his vote.

Mr. Delk's lawyer, Kenneth Gross, said: ''His view is that there was no violation, even by Freddie Mac here. These were personal events, held off site, paid for personally, totally personal events, that did not violate the law.''

The corporation has been rocked by several scandals, including one over accounting errors that understated its profits by $5 billion over several years. Freddie Mac and its larger competitor, Fannie Mae, are two of the most formidable lobbying forces on Capitol Hill. Freddie Mac reported paying more than $7 million in lobbying fees last year, according to incomplete filings compiled by the independent Web site PoliticalMoneyLine.

Many of the fund-raisers organized by Mr. Delk featured Representative Michael G. Oxley, the powerful chairman of the Financial Services Committee, and agency records show that Mr. Oxley's leadership political action committee received repeated donations, as did many members of the same committee, from Freddie Mac.

Craig B. Holman, the campaign finance lobbyist for Public Citizen, the watchdog group that filed the original complaint with the F.E.C. in October 2003, said, ''This is yet another example of the corrupting nexus between lobbyists, campaign money and lawmakers.''